Archive for January, 2009

The National Association of Realtors is protesting an increased fee being charged by Fannie Mae.  The fee, as much as 3.25% of the loan amount, is being charged to lenders who pass on to borrowers with credit scores as ‘low as 690.’  See article by James R. Hagerty in the Wall Street Journal.

Let’s do a quick analysis.  This really makes sense.  If you have a loan amount of $200,000, then the fee would be $6,500.  And, that doesn’t include any title company, broker fees, appraiser fees, etc.  Great way to jump start economy, Fannie.

Since the average credit score nationwide is around 690, this hurts the average borrower.

Good luck to the National Association of Realtors!

House in Phoenix

My friend, Janet, who lives in Phoenix is planning to buy a house for herself.  Her last two purchases have been investment properties.  This one she’s going to live in.  Janet is very practical, but

“I feel very emotional about this,” she says.

Right.  Is IS emotional. But as long as you throw in some common sense, the decision to buy could be right for you.

Janet is doing it right. She:

1. Already owns her current home outright.
2. Has her emergency fund.
3. Is buying within her financial comfort level.
4. Is planning to live in the house for many years.

She’s working her plan.  It is scary though.  We’re talking about Phoenix –  property values have gone down tremendously in the past year.  There is a possibility values may continue go down in the next year. It won’t matter to her because she’ll still be in the house when they rise.

If you are thinking about buying, are you working your plan?  Are you keeping your wits about you, while at the same time realizing it is emotional?